Hotel Industry Leading Indicator - HIL - Up In December
Future business activity in U.S. hotels rose in December according to the latest reading of the Hotels' future business conditions (HIL) indicator. e−forecasting.com's HIL, a composite indicator that gauges future monthly overall business conditions in the U.S. hotel industry, climbed by 0.7% in December to 112.9, following a flat performance in November. The index is set to equal 100 in 2005.
HIL's six-month growth rate, which has historically confirmed the forthcoming turning points in U.S. hotel business activity, posted a positive rate of 3.5% in December, following a positive rate of 2.4% in November. This compares to a long-term annual growth rate of 3%, the same as the 30-year average annual growth rate of the industry's gross domestic product.
The probability of the hotel industry entering into recession in the near-term, which is detected in real-time from HIL with the help of sophisticated statistical techniques, registered 5% in December, down from 8.8% reported in November. When this recession-warning gauge passes the threshold probability of 50% for a more than three months, the U.S. hotel industry will enter a recession phase in its business cycle.
"With the full December HIL report, we see after several months of near zero growth, there is a nice monthly bump in the overall leading indicator, with improvements in the six month growth rate for the first time since last May," commented Maria Simos Sogard, CEO of e-forecasting.com.
Five of the forward looking indicators of business activity that comprise Hotel Industry Leading (HIL) Indicator had a positive contribution to its change in December: Jobs Market; Hotel Worker Hours; Foreign Demand; Yield Curve; and Housing Activity. Four indicators of future business activity had a negative or zero contribution to HIL's change in December: Hotel Profitability; New Orders; Oil Prices; and Vacation Barometer.
"The components covering the labor market, both general and hotel specific, markedly improved and were a strong driving force to the positive report in December," continued Mrs. Sogard.
e-forecasting.com, an international economic research and consulting firm, offers forecasts of the economic environment using proprietary, real-time economic indicators to produce customized solutions for what’s next. e−forecasting.com collaborates with domestic and international clients and publications to provide timely economic content for use as predictive intelligence to strengthen its clients’ competitive advantage.
The US hotel industry leading indicator, or HIL for short, is a monthly leading indicator for the industry. Building off the tracking success of HIP, the real-time indicator for the US hotel industry, HIL was built as a composite indicator that uses nine different components that, on average, when put together have led the industry four to five months in advance of a change in direction in the industry business cycle. HIL provides useful information about the future direction of the US hotel industry.
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